The pound made some limited gains vs the US dollar in spite of the UK’s inflation data showing a fall compared to the previous month. This was widely expected so did little to the market as the data was compiled by mid-March which was prior to the UK’s official lockdown which began on 23rd March.
Yesterday we saw a number of different announcements made by government. UK Health Secretary Matt Hancock confirmed that human trials began for a human vaccine created by the University of Oxford. Mortality rates in the UK have reached their highest level in 20 years with an additional 18,000+ deaths confirmed cases of the Coronavirus.
In terms of the impact of this latest announcement the pound has remained steadfast against the US dollar since early this week.
Last night in the 5pm press conference Chris Whitty suggested that social distancing in some form could last for a long time. The Chief Medical Officer claimed, ‘we’re going to have to do a lot of things for quite a long period of time…this disease is not going to be eradicated, it is not going to disappear.’
However, officials have claimed that the UK is coming to the peak of the virus and this is why the questions from the press are all interested in when terms of the lockdown will begin to change.
The one thing to bear in mind is that although Chris Whitty is advising the government it will still be ministers who have to decide how to handle their next approach. Different countries have adopted alternative stances to their ways of handling the outbreak.
A major concern for the government is the impact upon the economy as well as the general well being of people negatively affected by the lockdown. One approach that the government appears to be intent on using is that of tracing. Matt Hancock went on to say ‘test, track and trace is a critical part of keeping the spread of this virus low.’
US Economy With Further Announcements to Impact Gbpusd Exchange Rates
Moving the focus towards the US economy and initial jobless claims are due to be published later this afternoon. This could confirm US unemployment moving towards 15% of the labour force.
We end the week with the US releasing non-defence Capital Good Orders. Depending upon the release compared to the expectation this could cause the Pound to move against the US dollar.
In the meantime Trump is keen on attempting to reopen the US for business once again. He is looking at plans to reopen part of the US economy and is looking to pass the responsibility on to governors of state.
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